The China Strategic Risks Institute (CSRI) released a report on May 13 warning that companies around the world, especially those in Taiwan, are facing a growing risk from the Chinese Communist Party’s “extraterritorial legal warfare.”
The report says Beijing may pressure foreign-based companies to comply with mainland Chinese laws in ways that enable transnational repression targeting Taiwanese individuals.
CCP uses ‘legal warfare’ against Taiwanese citizens
CSRI deputy researcher James Jennion told the Central News Agency that the CCP has long conducted surveillance, intelligence gathering, and monitoring operations against Taiwanese citizens overseas. He added that Chinese laws governing cross-border data transfers contain many gray areas, giving authorities broad room for interpretation.
Jennion said that if British companies have operations or commercial interests in China or Hong Kong, they could face pressure from Beijing to provide data related to Taiwanese citizens, regardless of whether the companies themselves are physically located inside China.
The report also highlighted risks posed by China’s legal warfare strategy toward Taiwan. For example, Beijing could use legal measures to obstruct Taiwan’s efforts to reduce economic dependence on China by shrinking production or supply-chain activities within China and expanding manufacturing operations overseas. The CCP could characterize such Taiwanese policies as actions that “threaten China’s industrial security.”
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In addition to targeting Taiwanese companies, Beijing’s legal warfare strategy also targets Taiwanese citizens. Various legal documents issued over the years — including the judicial guidelines jointly released in June 2024 by multiple organs of Communist China’s judicial system, the Ministry of Public Security, and the Ministry of State Security, commonly referred to as the “22 Measures Against Taiwan Independence” — have provided an increasingly hardline legal basis for the CCP to assert extraterritorial jurisdiction over Taiwanese citizens. Foreign companies with Taiwanese clients, employees, or investors may therefore need to prepare for pressure from Beijing.
Psychological warfare
According to a report by HK01, the CCP’s use of long-arm jurisdiction against Taiwan is also intended as a form of psychological warfare: to make Taiwanese people fear legal repercussions and become reluctant to transit through or enter Hong Kong or mainland China, thereby fostering social divisions and weakening public resolve for self-defense within Taiwan.
The report noted that although the United Kingdom has strict data-protection laws, pressure and demands from Beijing may be highly covert. Both China’s actions and the cooperation of foreign companies with Chinese authorities may be difficult to monitor or hold accountable. As a result, the report recommends that companies conduct detailed assessments of their exposure to risks arising from China’s legal warfare tactics.
The report also called on the British government to formulate operational guidelines to help companies respond to demands from Beijing and fulfill their responsibilities toward stakeholders such as clients and employees. China Strategic Risks Institute stated that it plans to brief government ministries and parliaments in various countries on its research findings.
Chinese laws under application
The report lists 15 Chinese laws and regulations that provide the legal basis for China’s extraterritorial legal warfare, emphasizing that companies around the world will increasingly face difficult compliance dilemmas — namely, how to simultaneously comply with, or reconcile, conflicts between Chinese regulations and their own domestic laws or “international standards.”
Foreign companies and entities located outside China may all face risks stemming from the CCP’s cross-border law enforcement and long-arm jurisdiction.
More significantly, Beijing is also leveraging its influence over international organizations, platforms, and even think tanks to promote “international standards” favorable to the Chinese government.
The report highlights that the CCP is increasingly using the broadly defined and ambiguously interpreted concept of “national security” to justify extraterritorial legal warfare.
Its impact extends beyond politics, diplomacy, and personal security, and increasingly affects global efforts at “de-risking” from China — including reducing supply-chain dependence on China, relocating production facilities outside China, and sanctions imposed by governments on Chinese entities for clear national-security reasons.
Punishing foreign companies pursuing ‘de-risking’
The report further states that Beijing has introduced new laws to create a legal foundation for penalizing foreign companies attempting to “de-risk” from China.
Examples include the “Regulations on the Security of Industrial and Supply Chains” issued by China’s State Council in March this year, and the “Anti-Foreign Improper Extraterritorial Jurisdiction Regulations” released in April.
According to Beijing, these regulations are intended to counter what it describes as “long-arm jurisdiction” and discriminatory treatment imposed by other countries on Chinese citizens and entities, as well as actions deemed harmful to China’s “national sovereignty, security, and development interests.”
The regulations also incorporate a “malicious entities list,” which could be used to retaliate against companies implementing sanctions imposed by the European Union or the United States on Chinese entities. Potential retaliatory measures include asset freezes or exclusion from the Chinese market.
Response to such risks
James Jennion suggested that, in addition to issuing operational guidance, the United Kingdom government should also adopt legislation requiring companies to incorporate the identification, prevention, mitigation, and response to such risks into their routine business operations at every stage.
“Extraterritorial lawfare” refers to the use of law as a political weapon by a regime seeking to apply its domestic laws to individuals and entities outside its borders. The core concepts include “long-arm jurisdiction,” “transnational repression,” and “cross-border law enforcement.”
Examples include authorities in China or Hong Kong using direct or indirect methods overseas to monitor, intimidate, coerce, or even violently attack targeted individuals; establishing overseas “secret police stations”; and offering rewards to people abroad who assist authorities in capturing dissidents living in exile.
In recent years, the CCP has increasingly adopted “legal warfare” as a tool for external expansion and political suppression, particularly by using mechanisms of “extraterritorial jurisdiction” to extend its legal reach into Hong Kong and Taiwan.
Legal warfare is often combined with propaganda warfare and psychological warfare, with the aim of creating a chilling effect, restricting the freedoms of dissidents, and weakening their resolve to resist.
’22 measures against Taiwan independence’
Beijing has used the so-called “22 Measures Against Taiwan Independence” to punish what it calls “diehard Taiwan independence separatists.”
It has also relied on the extraterritorial provisions of the Hong Kong National Security Law — particularly Article 38 — which states that offenses such as “secession,” “subversion,” or “collusion with foreign forces” can be prosecuted even if committed overseas by individuals who are not permanent residents of Hong Kong and are not physically present there.
As a result, overseas Hong Kong activists and pro-democracy dissidents living in exile abroad may still face arrest warrants and prosecution by authorities in China.
